Congressman Brad Sherman is again introducing legislation to revoke Most Favored Nation (MFN) status for China and direct the President to negotiate a new trading relationship that is designed to eliminate the trade imbalance. Sherman first introduced the legislation in the previous session of Congress in 2010.
The bill is designed to force China to enter expedited negotiations to create balanced trade between our two countries within four years. Warren Buffet proposed a balanced trade system in a November 2003 Fortune magazine article on America's growing trade deficit.
Sherman, the Ranking Democrat on the House Foreign Affairs Subcommittee on Terrorism, Nonproliferation, and Trade, is joined by Representatives Marcy Kaptur, Peter DeFazio, Dana Rohrabacher, and Walter Jones in introducing the legislation.
The bill revokes MFN for China six months after enactment and directs the President to negotiate a new trading relationship with China designed to eliminate the trade imbalance. The bill also provides for the expedited consideration of any new trade partnership with China that will bring the trade deficit down to zero.
"The U.S.-China trade relationship is horrendously lopsided. In the year 2000, the advocates of Most Favored Nation status for China promised that we would see more jobs for Americans and great opportunities for Americans to manufacture items and send them to China," said Congressman Sherman. "Unfortunately, we have seen the opposite occur: the U.S. has exported jobs to China. And China has abused the trading relationship in many ways, from currency manipulation to the piracy of intellectual property. That is why I have introduced legislation to revoke Most Favored Nation status from China until the President establishes a more level playing field between our two nations."
The United States made MFN status for China permanent on October 10, 2000. Congressman Sherman voted no on the bill in Congress, which authorized the extension of non-discriminatory treatment to the products of China.
The United States' trade deficit with China has grown from approximately $84 billion in 2000 to $273 billion in 2010. For every dollar's worth of goods the United States imports from China, our country exports only about 25 cents worth of goods to China. Our exports to China equal only 1.6% of China's GDP, and this percentage has actually declined since 2006.